Bank offloads Deccan loans to Pegasus ARC

IndusInd Bank has sold its exposure (loan worth Rs100 crore) in financially ailing Deccan Chronicle Holdings Ltd (DCHL) to Pegasus Asset Reconstruction Company.

Romesh Sobti, managing director of the bank, said they’d made a 40 per cent provision in the third quarter, much higher than the regulatory norm, for the Deccan Chronicle account.

The recovery is expected to be in the region of Rs60 crore. The ARC will issue securities receipts to IndusInd Bank, he said.

Another private bank, Axis, classified its loans to DCHL as a non-performing asset in the second quarter.

It has already made adequate provisions against the exposure.

In the second quarter, lenders to DCH had considered taking the account to the corporate debt restructuring cell. The idea was taken off the table after ICICI Bank, the lead lender, withdrew the proposal.

Deloitte is conducting a forensic audit on DCH. Originally, it was to give its report by October-end.